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G-III Apparel's Strategic Transformation Gains Steam With Marc Jacobs
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Key Takeaways
G-III expects Marc Jacobs to generate $360 million in global sales in fiscal 2027.
Marc Jacobs gets about 90% of revenues from handbags, leather goods & accessories, leaving room for growth.
G-III raised adjusted EPS guidance to $2.20-$2.30, while keeping fiscal 2027 sales near $2.71 billion.
G-III Apparel Group, Ltd. (GIII - Free Report) is advancing its strategic transformation following the completion of its acquisition of Marc Jacobs. The transaction deepens the company’s owned-brand portfolio while reducing its reliance on licensed Calvin Klein and Tommy Hilfiger products. It also adds a globally recognized luxury label with meaningful expansion potential across categories, channels and markets.
Marc Jacobs’ operating business is expected to generate $360 million in global sales in fiscal 2027. G-III believes the brand can ultimately generate $1 billion in annual revenues. Handbags, small leather goods and accessories currently account for roughly 90% of revenues, creating considerable whitespace in ready-to-wear, wholesale distribution, international markets and licensing.
The ownership structure offers several value-creation avenues. G-III controls the Marc Jacobs operating company, encompassing retail, wholesale and e-commerce, while holding 50% of the brand’s intellectual property joint venture with WHP Global. Combining G-III’s sourcing expertise and retailer relationships with WHP’s licensing capabilities could broaden distribution and strengthen licensing income over time.
Notably, G-III’s wider portfolio shift is already supporting profitability. Second-quarter fiscal 2027 net sales declined 10% to $554.1 million, largely reflecting planned reductions in Calvin Klein and Tommy Hilfiger sales. Nevertheless, the go-forward portfolio grew at a high-single-digit rate, while the gross margin expanded 440 basis points to 45.2%.
Management maintained fiscal 2027 sales guidance of $2.71 billion and raised the adjusted EPS guidance to $2.20-$2.30, excluding the impacts of Marc Jacobs. The acquisition is expected to be dilutive during the first 12 months of ownership and accretive thereafter. Although execution and license-exit risks remain, G-III’s brand-building record, liquidity and growth playbook provide a solid foundation for expanding Marc Jacobs.
GIII’s Price Performance, Valuation & Estimates
Shares of G-III have risen 4.9% over the past year against the industry’s 7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, GIII trades at a forward price-to-sales ratio of 0.43, below the industry’s average of 2.30. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for G-III’s fiscal 2027 earnings implies a year-over-year decline of 14.2%, whereas the estimate for fiscal 2028 indicates an uptick of 9.8%. Earnings estimates for fiscal 2027 and 2028 have been unchanged over the past 30 days.
Image Source: Zacks Investment Research
GIII currently carries a Zacks Rank #3 (Hold).
Key Picks
FIGS, Inc. (FIGS - Free Report) is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’ current financial year earnings and sales suggests growth of 89.5% and 18.2%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.
Boot Barn Holdings, Inc. (BOOT - Free Report) is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company also has a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.
Fossil Group, Inc. (FOSL - Free Report) is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.
The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.
View the Zacks #1 Rank List
Image: Bigstock
G-III Apparel's Strategic Transformation Gains Steam With Marc Jacobs
Key Takeaways
G-III Apparel Group, Ltd. (GIII - Free Report) is advancing its strategic transformation following the completion of its acquisition of Marc Jacobs. The transaction deepens the company’s owned-brand portfolio while reducing its reliance on licensed Calvin Klein and Tommy Hilfiger products. It also adds a globally recognized luxury label with meaningful expansion potential across categories, channels and markets.
Marc Jacobs’ operating business is expected to generate $360 million in global sales in fiscal 2027. G-III believes the brand can ultimately generate $1 billion in annual revenues. Handbags, small leather goods and accessories currently account for roughly 90% of revenues, creating considerable whitespace in ready-to-wear, wholesale distribution, international markets and licensing.
The ownership structure offers several value-creation avenues. G-III controls the Marc Jacobs operating company, encompassing retail, wholesale and e-commerce, while holding 50% of the brand’s intellectual property joint venture with WHP Global. Combining G-III’s sourcing expertise and retailer relationships with WHP’s licensing capabilities could broaden distribution and strengthen licensing income over time.
Notably, G-III’s wider portfolio shift is already supporting profitability. Second-quarter fiscal 2027 net sales declined 10% to $554.1 million, largely reflecting planned reductions in Calvin Klein and Tommy Hilfiger sales. Nevertheless, the go-forward portfolio grew at a high-single-digit rate, while the gross margin expanded 440 basis points to 45.2%.
Management maintained fiscal 2027 sales guidance of $2.71 billion and raised the adjusted EPS guidance to $2.20-$2.30, excluding the impacts of Marc Jacobs. The acquisition is expected to be dilutive during the first 12 months of ownership and accretive thereafter. Although execution and license-exit risks remain, G-III’s brand-building record, liquidity and growth playbook provide a solid foundation for expanding Marc Jacobs.
GIII’s Price Performance, Valuation & Estimates
Shares of G-III have risen 4.9% over the past year against the industry’s 7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, GIII trades at a forward price-to-sales ratio of 0.43, below the industry’s average of 2.30. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for G-III’s fiscal 2027 earnings implies a year-over-year decline of 14.2%, whereas the estimate for fiscal 2028 indicates an uptick of 9.8%. Earnings estimates for fiscal 2027 and 2028 have been unchanged over the past 30 days.
Image Source: Zacks Investment Research
GIII currently carries a Zacks Rank #3 (Hold).
Key Picks
FIGS, Inc. (FIGS - Free Report) is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’ current financial year earnings and sales suggests growth of 89.5% and 18.2%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.
Boot Barn Holdings, Inc. (BOOT - Free Report) is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company also has a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.
Fossil Group, Inc. (FOSL - Free Report) is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.
The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.